Swiss watch industry facing hardships as the economy unwinds
THE Swiss watch industry has survived lickings before, but Rolex, Omega and Cartier now face a combination of economic punches putting them back on their heels.
The industry was just adapting to the downturn from political protests in its largest market, Hong Kong, when the coronavirus outbreak hit. Now, as China’s economic slowdown is set to engulf the rest of the world, the strong Swiss franc, surging gold prices, and store closures are set to saddle companies like Swatch Group AG and Richemont with higher costs.
Rolex shut down all its plants in Switzerland for at least 10 days starting on Tuesday. Richemont has been offering price cuts of as much as 49 percent for second-hand Cartier timepieces in a one-week special offer on its vintage resale site, Watchfinder. Watch fairs in Basel and Geneva have been cancelled. Swatch will put as much as 70 percent of its Swiss production staff on reduced working hours by the end of the week.
The first half will probably be the worst ever for the modern luxury-goods industry, Sanford C Bernstein’s Luca Solca said. That threatens employment in Swiss watch-making, which supports 59 000 people and accounts for almost a tenth of the country’s exports.
To make matters worse, the industry depends heavily on workers living across the border in France, and many of those are staying home in containment efforts or because border crossings have closed.
AFRICAN Rainbow Capital Investment (ARCI) chairperson Patrice Motsepe at the company listing at the Main JSE Board.